Another team for output measure is driver. Recall from chapter 2 that activity drivers are observable causal factors that measure the amount of resources a cost object uses. Activity drivers explain changes in activity costs by measuring changes in activity use or output. Thus, the driver for material handling may be number of moves; the driver for shipping goods may be the units sold; and the driver for laundering hospital bedding may be pounds of laundry. The choice of driver is tailored not only to the particular firm but also
particular activity or cost being measured. Therefore, in order to understand the behavior of costs, we must first determine the underlying activities and associated drivers that measure activity capacity and usage. The need to understand this cost-activity relationship leads us to the determination of an appropriate measure of activity output or activity driver.